Mastering Recharge Centers: Key Strategies for Success

1. National Council of University Research Administrators Keys to Successfully Developing and Managing Recharge Centers @2014 National Council of University Research Administrators

2. Presenters: • Keys to Successfully Developing and Managing Recharge Centers • ThongsySingvongsa, CRAResearch Administrator, Preventive Medicine (Departmental)Northwestern University Feinberg School of Medicine in Chicago, IL • Nicole Nichols, MPA, CRAResearch Administrator, Internal Medicine – Oncology (Departmental) Washington University in St. Louis, MO • @ 2014 National Council of University Research Administrators

3. Agenda / Learning Objectives • What is a recharge center? • Startup process • Rate Development • Tools or practices for best management • @ 2014 National Council of University Research Administrators

4. The Recharge Process • Understanding what constitutes a Recharge Center / Activity • Develop a plan for a new center • Calculate rates & set prices • Establish a specific fund/account just for recharge activity • Manage the account per university & OMB Circular A-21

5. What is a recharge center? • A recharge center is a unit within an institution that provides a specialized service or good to internal users on a recurring basis by charging a fee. It is designed to be cost-efficient and not a profit-generating unit. • Recharge centers provide goods and services through a “charge-back” mechanism therefore, they are designed to recoup the costs of running the recharge center.

6. Questions to Consider • Does another unit at university provide similar service? • Can an external vendor provide the same service for cheaper? • Do you have a vested interest & support from your department and constituents? • See handout from Wash U (Questions to Consider Before Setting Up a Recharge Process or Center)

7. Develop a Plan • Describe goods/services • Customer base • Projections of expenses/revenues • Who will cover deficits (if any) • Support of housing department?

8. ProcessFlow (ideal)

9. Developing your rate(s) • General Formula • Calculated for each product/service offered by center • Plan to operate at break-even with no significant surplus or deficit • Depending on your institution, this could be a 3 or 5 year rolling average, etc. Expenses Incurred (+/- prior year surplus/deficit) Estimated Level of Activity (units)

10. Expenses included in the Rate Calculations • Salary and Fringe* • Materials and Supplies • Equipment; depreciation (depends on your university policy – at Wash U, only allowed in Recharge Centers over $250K) • Equipment service contracts • Other Service Costs

11. UNALLOWABLE Costs • Dependent tuition benefit costs • Personnel salary funded on sponsored projects • Entertainment/alcoholic beverages • Space rental costs • Memberships • Bad debt • Fines or penalties • Other costs disallowed per OMB A-21

12. Determining Usage Basis • Hours Used • Tests performed • Lab runs • Other Reasonable method

13. Billing • Should be done on a monthly basis or sooner • Should occur after the work is performed • Reconcile statements and accounts & follow-up with outstanding accounts

14. Administrative Requirements • Document and calculate cost-based rate(s) and publish rate(s) • Adhere to federal cost accounting guidelines such as OMB A-21 • Establish and maintain a separate account/fund to capture revenues and expenses • Track actual usage

15. Administrative Requirements (Cont…) • Bill customers on a timely basis • Reconcile and analyze surplus/deficit position at least annually • Retain records

16. Questions?

17. THANK YOU! • ThongsySingvongsa, CRAResearch Administrator, Preventive Medicine (Departmental)Northwestern University Feinberg School of Medicine in Chicago, ILEmail: t-singvongsa@northwestern.edu; Phone: 312-503-1832 • Nicole Nichols, MPA, CRAResearch Administrator, Internal Medicine – Oncology (Departmental)Washington University in St. Louis, MO Email: NNICHOLS@DOM.wustl.edu; Phone: 314-362-0698 • Wash U Recharge website: http://research.wustl.edu/ComplianceAreas/RechargeCenters/Pages/default.aspx